Overtures ad clickthroughs seem to drop significantly as you move down each position through their rankings, and their open bidding system means the bid prices are more likely to be near one another.

Google's customer delivery seems to drop a big amount from position 1 to 2 and then drops off slowly the rest of the way through. Positions 4 through 6 seem rather close to one another.

The fact that Google hides the bid price and the prices drop down significantly by position means that there is perhaps a wider range of ad positions that can provide a decent ROI on Google than on Overture.

In the future Atlas DMT intends to do conversion rate measurements (which are usually a bit higher as you move to lower ad positions) which will help give a better idea of profit potential by position, but there are many factors outside of bid position that can help determine the click through rate and profitability of your account.

Eventually more search engine marketing measurements will become more sophisticated, ignoring ROI and measuring profit elasticity.

Placing Image Ads on Google:
"At this time, we won't show image ads on Google. The initial launch of image ads is focused on sites already showing graphical ads. Because Google image ads are targeted specifically to a page's content, advertisers showing ads on these sites would realize the greatest benefit. (Please note that a content site publisher must opt in to the image ads program before your image ads may appear on his or her site.)"

How Does Google Know When to Display Image Ads?
If your image ad is more relevant, it will appear. If not, your text ad may appear in its place. This targeting model ensures you're reaching your prospects with the most effective ads.

Will Google Put Image Ads on My Site?
Google AdSense publishers can chose to opt in to graphic ads. Graphic ads will not automatically appear on AdSense publishers websites. You can choose to run image ads by simply selecting the image ads checkbox from the Ad Preference page of your AdSense account. Or, set your preference at a page level by selecting the type of ads you'd like to show when generating your ad code.

Google has recently changed it's trademark policy to allow people to bid on trademark phrases of companies within the US and Canada. Inside the US and Canada they will not allow trademark terms to appear in the ad copy. Outside those areas the will check ad text and keyword.

There has not yet been any clear statement in what the valid trademark laws are on the internet. With the advent of <iframe>'s and paid ads triggered by keywords the waters are sure to be muddy for an exceptionally long time...perhaps indefinitely.

Trademark owners should still be able to protect their trademarks via the autmated price system of Google. Trademark terms showing up in ads will warrent greater clickthrough rates since their terms will appear bolded. This will cause the prices to be reduced as these clickthrough rates are factored into click price. Your competitors will be required to spend much more to have their ad compete. Google AdWords Trademark Complaint Procedure – Trademark rights in US and Canada

When we receive a complaint from a trademark owner, we will only investigate whether the advertisements at issue are using the trademarked term in ad text . If they are, we will require the advertiser to remove the trademarked term from the text of the ad and prevent the advertiser from using the trademarked term in ad text in the future. Please note that we will not disable keywords associated with trademark usage. In addition, please note that any such investigation will only affect ads served on or by Google.

When we receive a complaint from a trademark owner, our review is limited to ensuring that the advertisements at issue are not using the trademarked term in the ad text or as a keyword trigger. If they are, we will require the advertiser to remove the trademarked term from the ad text or keyword list and will prevent the advertiser from using the trademarked term in the future. Please note that any such investigation will only affect ads served on or by Google.

Many of the Yellow Pages type companies are learning that their content has value online.

On March the 1st SuperPages, Verizon's Internet Yellow Pages website, will launch a redesigned website which includes pay per click advertising. Duncan Parry previews the PPC product that will be on offer and asks James Palma, Directory of Strategy, how SuperPages aims to sell PPC advertising to local businesses. - from PayPerClickAnalysis.com article

Verison is planning on charging by category to help business save time.

The associated prices will weed out much of the advertising from the smaller unique competitors who are the ones that actually add the true value to the Verison SuperPages site.

A much better way to price it would be to sell as a hybrid. Offer the category listings, and also sell keyword listings in a Dutch auction. Assuming they could place the direct matches about their category listings, this would increase the quality of their product and allow them to sell more ad space.

Finally "FindWhat said shareholders of privately-held Espotting would get 7 million shares of FindWhat stock and about $20 million in cash. FindWhat said the total deal values Espotting at about $170 million based on last Friday's closing stock prices"
(from Rueters) Back in June FindWhat & Espotting crafted a deal of similar value. The problem with the old deal is that some of Espotting's books looked weak and FindWhat has seen its stock rise considerably. The original deal was 8.1 million shares of FindWhat and $27 million in cash.

"FindWhat also reported fourth-quarter net income of $3.5 million, or 15 cents per share, compared with a year-earlier profit of $2.7 million, or 14 cents per share.

For 2004, the company offered guidance for revenue of $95 million, with net income of 60 cents per share. Analysts surveyed by Reuters Research, a unit of Reuters Group, had expected revenue of $96.6 million and earnings per share of 63 cents."
(source News.com)

Overture (2) appears on Yahoo, MSN InfoSpace, AltaVista, AllTheWeb, and many other sites. Owned by Yahoo.

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Pay per click search engines usually drive most of their traffic based on their partner network. Pay per click ads are mixed in with meta search engines and usually exist at the top of search results on major search engines. (personal rankings)Enhance Interactive (6)Espotting (European) powers many European portals which are not powered by Overture or AdWordsFindology - smaller PPC which allows you to select which partners your ads will appear on and lets you target your ads geographically. Primarily focused on lead generation, retail, and adult traffic markets. (8)FindWhat (3)Google AdWords (1) - powers Google, Ask Jeeves, AOL, IWON, Earthlink and many other sitesKanoodle (5) - Kanoodle has some really cool features and a good contextual advertising program (especially for financial type websites).LookSmart - while actually being a directory, LookSmart has a decent sized distribution network. I have been told many complaints about their poor customer service though and when I tried their engine their traffic quality was crap. Recommend avoiding (4)Overture (2) appears on Yahoo, MSN InfoSpace, AltaVista, AllTheWeb, and many other sites. Owned by Yahoo.Search123 (7)

Some recent articles ("Google's House of Cards" "A Perfect Storm for Pay Per Click") have been saying that the ROI for paid advertising is going away. It has been. It was not very competitive a few years ago, but now with over 150,000 people in the market you need to be more effective to extract profits from a campaign.

I honestly think many of the articles are suggested / written by people who want to make their own jobs easier and make more money while doing it. Some articles may even be written to scare away competition or drive leads to firms who provide the services.

In the past a sloppy website with low conversion rates was ok because there was little competition. Now some areas are requiring a smooth ad, which is well targeted, that leads to a smooth site, which has great usability, and is customer centric. In essence the shakeup of the organic listings and the rising costs of pay per click ads are forcing websites (and the internet as a whole) to be more functional.

There are few mediums which have feedback as rapid as AdWords does. Pay per click is here to stay. Those who know how to use it will make a ton of money.

Just another tip on improving conversion rates with Google AdWords. When search words appear in a Google ad they are bolded. A good way to improve click through rate (and thus lower price per click) is to place keywords in the ad.

Sometimes it may not be practical to create 100 different ads and 100 different groupings. If you have similar terms which can use the same creative description, but you would like to have the title dynamically match searched keywords you can.

When you create the AdWords creative place {keyword: } in the first line and then fill out the rest of the creative like normal. Automatically your title will match the search terms which will improve click through rates. Please note that Google does not want this feature used on search terms which are mis spelled or otherwise break their ad policies.

When you use {keyword: } make sure you place a keyword after it so that search terms which may be too long or are not processed correctly still have an ad to show. I know this because I had one of my Google AdWords ads disapproved for not doing this. For me I would probably use something like {keyword:SEO Book}.

Some people will want to try this with a huge catalog of products and will lose money in the process. When products are widely varying you want to send the person to the specific page for that product so you must specify that as well.

This technique is likely to be most profitable to those who use it on smaller niche specific areas...the whole thing that makes Google so appealing is that you can customize every aspect of your ad and track every cent spent from begining to end.

Dynamic keyword insertion capitalization:
{keyword:} will make the title small
{KeyWord:} will capitalize all the words in the Google AdWords ad title.